McCormick+Schmitz Handbook for value chain research on - PACA

Answering this question may be critical to assess the prospects of particular export
<strong>chain</strong>s. For example, the US government grants ‘Most Favoured Nation Status’ to
China but not to neighbouring countries like Vietnam. The official source would
not provide this in<strong>for</strong>mation in such a straight<strong>for</strong>ward way. It is more likely to
read like this. “The United States has granted permanent MFN status (now known
as Normal Trade Relations NTR) to most countries internationally. However, a
short number of countries do not have NTR status, they include: Afghanistan,
Cuba, Laos, Montenegro, North Korea, Serbia, and Vietnam. Also, select nation’s
NTR status is reviewed annually. These include: Armenia, Belarus, Bulgaria,
China, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan,
Turkmenistan, Ukraine, and Uzbekistan.” You may wish to check with the United
States Trade Representative’s office to find further in<strong>for</strong>mation on the NTR status
of the countries you are most concerned with; see http://www.ustr.gov/. Up to
date in<strong>for</strong>mation on such matters should also be available from the embassy of the
importing country concerned, or you may find that the Manufacturers Association
provides such in<strong>for</strong>mation routinely to its members.
• How does multi-lateral trade policy of importing countries affect the growth prospects
of local producers?
The Multi-Fibre-Agreement (MFA) is particularly relevant here. The MFA
protected developed countries against imports from developing countries. This
system of protection is being gradually dismantled over the period 1995 to 2005.
The impact of developing country exporters will vary: Asian exporters are likely
to gain and African exporters are likely to loose (see ‘Trade Protection in the
Textile and Clothing Industries’, Trade and Investment Background Briefing No.4,
IDS-Sussex 1999).
Another, more recent example is the US Government’s Africa Growth and
Opportunity Act (AGOA), which extends duty-free import status to African
countries that meet certain requirements. The Act is still fairly new, so it is
difficult to assess its impact. If it works as anticipated, it should make African
garments more competitive on the US market. For more in<strong>for</strong>mation on AGOA,
see www.agoa.gov.
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